Correlation Between Manulife Financial and Royal Helium
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Royal Helium at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Manulife Financial and Royal Helium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manulife Financial Corp and Royal Helium, you can compare the effects of market volatilities on Manulife Financial and Royal Helium and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Manulife Financial with a short position of Royal Helium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Royal Helium.
Diversification Opportunities for Manulife Financial and Royal Helium
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Manulife and Royal is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Royal Helium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Helium and Manulife Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Manulife Financial Corp are associated (or correlated) with Royal Helium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Helium has no effect on the direction of Manulife Financial i.e., Manulife Financial and Royal Helium go up and down completely randomly.
Pair Corralation between Manulife Financial and Royal Helium
Assuming the 90 days trading horizon Manulife Financial Corp is expected to generate 0.05 times more return on investment than Royal Helium. However, Manulife Financial Corp is 18.45 times less risky than Royal Helium. It trades about 0.0 of its potential returns per unit of risk. Royal Helium is currently generating about -0.12 per unit of risk. If you would invest 2,415 in Manulife Financial Corp on September 2, 2024 and sell it today you would lose (1.00) from holding Manulife Financial Corp or give up 0.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Financial Corp vs. Royal Helium
Performance |
| Timeline |
| Manulife Financial Corp |
| Royal Helium |
Manulife Financial and Royal Helium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and Royal Helium
The main advantage of trading using opposite Manulife Financial and Royal Helium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Royal Helium can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Royal Helium will offset losses from the drop in Royal Helium's long position.| Manulife Financial vs. Royal Helium | Manulife Financial vs. Vista Gold | Manulife Financial vs. Excellon Resources | Manulife Financial vs. Condor Energies |
| Royal Helium vs. Desert Mountain Energy | Royal Helium vs. First Helium | Royal Helium vs. Avanti Energy | Royal Helium vs. Total Helium |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the CEOs Directory module to screen CEOs from public companies around the world.
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